November Retails Sales Better then Expected

Retail salesBlack Friday doorbusters and other holiday promotions helped America’s top retailers beat Wall Street’s expectations for November. Retailers reported today an overall 6% increase in sales over November 2009.

Retail analysts’ average estimates had forecast a boost of 3% to 4%, according to Thomas Reuters, which had projected a 3.6% increase.

The results affirm what many retailers had been reporting: increased traffic both before, during and after Black Friday as well as an increase in some discretionary spending.

The Thomson Reuters same-store sales index, based on 27 retailers reporting, showed an increase of 6% for November, compared with Wall Street’s estimate of 3.6%. Comparable store sales or sales at stores open at least a year, are a closely watched gauge of retail performance and offer an early look at the strength of the shopping season, which can account for as much as a third of retailers’ annual revenues.

Since consumer spending equals about 70% of the U.S. economy, this year’s holiday sales season is being scrutinized to determine if the economic recovery can pick up steam.

Aggressive Retailers Got Rewarded

The November increase was the biggest since 2007 except for a 9.2% rise in March.

While many diverse retailers reported bigger than expected gains, promotional activity and discounting helped lure in shoppers. Some analysts cautioned that the discounting will need to continue in order to bring shoppers out in December, which could pressure margins.

“Retailers came out aggressively and got rewarded,” said Sherif Mityas, a partner in the retail practice at A.T. Kearney. “Merchants laid out a wider breadth of deals across the holiday weekend rather than the usual concentration on a handful of door-busters, and shoppers responded.”

John Long, a retail strategist at firm Kurt Salmon Associates said, “It’s difficult to say whether the promotions we saw in November, particularly early on in the month, pulled forward some of the volume we would be expecting to see in December.”

Long said December same-store sales would need to rise more than November’s number to end up with a similar increase. In December 2009, sales were up 3%, compared to November 2009, when they were up just 0.4%.

Black Friday weekend sales were particularly strong for apparel and for online sales, according to research from MasterCard Advisors’ SpendingPulse, which estimates total retail sales across all payment forms.

Pent Up Demand Fuels Fashion Sales

“Household wallets are pointing a little bit more toward retail,” said Michael McNamara, MasterCard’s vice president, research and analysis, who added he was encouraged by a 9.6% gain in apparel sales, which was fueled by a 3.9% increase in sales of women’s clothing and a 7.2% gain for men’s apparel. This was the second month in a row that women’s apparel sales recorded a gain, and the increase in men’s apparel reversed a sales decline in October.

Women’s apparel and accessories may be benefitting from pent-up demand, McNamara said. Since many women had cut back on spending on themselves during the recession, so a pick up in spending is an encouraging sign.

“We have continued to see people who have a pent-up demand,” said Keith Jelinek, a retail director at AlixPartners. “People are more optimistic because they feel things can’t get worse and believe there is a light at the end of the tunnel.”

A.T. Kearny’s Mityas said, however, that consumer spending is still heavily driven by promotional discounts, and that many shoppers are holding off for further price reductions.

“No question, consumers are still playing let’s-make-a-deal,” says Mityas. “They’ll wait until retailers blink again.”

Among the retailers reporting November sales today are:

● Macy’s Inc. said its same-store sales for the four weeks ended November 27, were up 6.1%. Total sales for November 2010 rose 7.8% to $2.344 billion from $2.174 billion in  November 2009.
“On Black Friday alone, more than 4.5 million shoppers visited macys.com and bloomingdales.com, with a similarly high level of record traffic on Cyber Monday,” said Terry Lundgren, president and ceo.
Looking ahead, Macy’s now expects earnings for the fourth quarter to be in a range of $1.44 per share to $1.49 per share, compared with previous guidance of $1.42 to $1.47 per share. This would result in full-year 2010 earnings of $1.96 to $2.01 per share, excluding expenses associated with the early retirement of debt, the company said.
Analysts’ average estimate was for the department store chain to earn $1.49 per share in the fourth quarter. The company now expects same-store sales in the fourth quarter to be up in a range of 3.5% to 4.5%, compared to previous guidance range of 3% to 4%.● Kohl’ssaid that revenue in stores open at least one year rose 6.1% in November, helped by more shoppers at its department stores during the first month of the holiday shopping season. The comparable store sales were well ahead of analysts’ average estimate of just 2.8%.Total sales for November rose 8% to $2.02 billion. Kohl’s said results were helped by more customers buying items. Footwear and men’s and women’s coats were especially popular purchases.

●JCPenney said an historic Black Friday helped the company achieve strong sales growth in November. The company posted sales for November of $1.845 billion, up 7.2% from $1.72 billion in the same period last year. Fueling growth was a 9.2% improvement in comparable-store sales, with all divisions and regions experiencing gains, with particular improvement in footwear and men’s apparel in the central and southwest regions.

The company experienced its biggest Black Friday sales event in the company’s history, lifting sales of fashion boots, Liz Claiborne sportswear for women and St. John’s Bay cashmere-blend pea coat and polos.

●Dillard’s said November same-store sales rose 8%, beating analyst expectations of 3%, while total sales rose 7%. The department store chain said November sales were $469.3 million, up from $437.9 million during the same period last year.

Dillard’s said sales of shoes. juniors’ and children’s apparel were “significantly above trend” during the month, while sales in the home and furniture category and the cosmetics category were “significantly below trend.”

●Nordstrom Inc. said that November comparable store sales rose 5.1%, surpassing Wall Street’s expectations due to a bi-annual sale and holiday shopping. Analysts’ average estimates were for a 3.8% increase. The sales rise included a 4.4% increase from Nordstrom stores, a 30.1% increase in direct sales and a 2.2 %rise in revenue from Nordstrom Rack off-price stores. Best-selling items included jewelry and women’s and men’s shoes. The company added that its bi-annual sale for women and kids also boosted sales. Sales were strongest in the South and Midwest and continued to lag in California. Total November sales were $815 million. So far this year, the company has generated $7.3 billion in revenue, a 13%increase over the first 10 months of 2009. Comparable store sales have so far risen 8.2%.

●Neiman Marcus Group posted a 5.8% increase in its November sales which hit $322 million, up from $305 million in November 2009. Comparable store sales in its Specialty retail stores segment, which includes Neiman Marcus and Bergdorf Goodman, increased 6.4%. Revenue growth trends were the strongest in stores in the Southeast, New York City and Texas. The categories in that performed the strongest included women’s shoes and accessories, designer handbags, jewelry and men’s. Neiman Marcus Direct reported 2.0% increase with top selling categories included women’s fine apparel and shoes, accessories and men’s.

● Saks Inc. said that revenue in stores open at least a year rose 5.3% in November, falling short of analysts’ expectations of a 9.5% increase. Total sales for November rose 4% to $254.9 million from $245.1 million a year earlier. The company said the best-selling items of the month included women’s shoes, outerwear and apparel, fashion jewelry, soft accessories, men’s contemporary sportswear and men’s clothing. Saks said that its Saks Direct channel also performed well during the month.

So far this year, the company has generated $2.14 billion in revenue, a 5.2% increase over the first 10 months of 2009. Sales in stores open at least a year have risen 5.5% so far this year.

● Bon-Ton Stores, operator of the Boston Store, Younkers, Elder-Beerman and Herberger’s, said same-store sales increased 2.9%. Total sales for November increased 2.7% to $319.1 million from $310.8 million in 2009. Tony Buccina, vice chairman and president merchandising, commented, “Our best performing categories were coats, home, shoes, men’s, children’s, cosmetics and fine jewelry, with better men’s and missy sportswear and better shoes outperforming total company sales. Weaker performing categories were the traditional moderate missy, petite and large-size sportswear and juniors.”

● Stage Stores said its revenue at stores open at least a year rose 2.4% in November, led by gains across several departments and regions. The increase was below analysts’ average estimates for a 2.8% increase. Total sales for November rose 5.2% to $116 million. Stage Stores said its children’s, cosmetics, footwear, juniors, men’s, outerwear and young men’s departments posted increases in revenue at stores open at least a year.

● Target says more shoppers came to its stores in November and spent more, helping its comparable store sales rise 5.5% during the month, better than analysts’ estimates for a 3.7% gain. Necessities like groceries and health care products remain the strongest sellers. Beauty products, apparel, electronics and toys were also in demand. Total sales for the four weeks ended Nov. 27 rose 6% to $6 billion. Target expects December revenue in stores open at least a year to rise in the low- to mid- single digit range.

●Gap Inc. reported November net sales were $1.51 billion, up 6% from $1.42 billion last year. The company’s comparable store sales were up 4% compared with flat comparable store sales for November 2009. The San Francisco-based company, which is one of the largest apparel retailers by revenue, also said year-to-date net sales were $11.81 billion for the forty-three weeks ended November 27, up 4% from $11.38 billion in the same year-to-date in 2009. Year-to-date comparable store sales increased 2% compared with a 5% decrease last year.

● Limited Brands, owner of the Victoria’s Secret chain, increased November same-store sales 10%, surpassing the 7% analysts’ average estimate. The company reported net sales of $893.0 million for November compared to net sales of $781.1 million the same time last year.  For the year to date, Limited Brands reported a comparable store sales increase of 9%, compared to a decline of 5% last year at this point.

● Express reported Wednesday a 6% increase in its third quarter sales and a special dividend. For the third quarter, sales increased to $450.6 million from $426.0 million in the third quarter last year, and comparable store sales increased 2%. Net income was $26.3 million, or 30 cents per diluted share. Last year, income for the quarter was $28.5 million, or 37 cents per diluted share. For the year to date, net sales increased 9.4% to $1.3 billion from $1.2 billion in the same period last year, and year-to-date comparable store sales increased 6%”We saw a terrific response to our Thanksgiving weekend events and are excited about our opportunities as the holiday season progresses,” Michael Weiss, president and ceo, said.

Abercrombie & Fitch posted a 22% gain in November comparable store sales, well above analysts’ average estimate of 10% The teen retailer reported net sales of $318.9 million for November, a 32% increase from net sales of $241.2 million in 2000.Year-to-date, the company reported net sales of $2.638 billion, an 18% from net sales of $2.234 billion last year. Comparable store sales increased 7% for the year-to-date period. ●Aeropostale said same-store sales fell 1% in November, while analysts were expecting growth of 0.9%. The company noted that it experienced a mid-single-digit same-store sales increase on Black Friday, but that sales trend “decelerated significantly” for the remainder of that weekend. Thomas Johnson took over as ceo from co-chief executive Mindy Meads who left the company.

For quarter ended October 30, Aeropostale reported a profit of $58.5 million, down from $62.6 million a year earlier. Excluding the charge, the company had projected per-share earnings of about 66 cents. Gross margin slid to 36.6% from 39.3%. Sales for the quarter grew 6.2% to $602.8 million, while same-store sales were essentially flat, compared to an increase of 10% last year. Aeropostale reiterated Wednesday that inventories remain “well-controlled.”

●American Eagle Outfitters said its November comparable store sales were flat, or essentially the same as sales from a year ago. The retailer reported total sales today of $272 million for November. That figure counts newer stores, and is up 2% from November 2009 Jim O’Donnell, ceo, said the month included a “strong performance over Thanksgiving weekend,” offsetting weaker periods earlier.

● The Buckle said November same-store net sales increased 7.9%. Net sales for month increased 12.5% to $86.9 million from the prior year four-weeks. Analysts had expected a 3.6%rise. For the year to date, revenue at stores open at least a year dipped 0.1%. Revenue for the 43 week fiscal period ended November 27 increased 4.7% to $733.7 million.

● Hot Topic reported that November comparable store revenue fell 2.1% from a year earlier but was still better than the 4.6% decline analysts’ average expected. While comparable store sales fell 2.9% at its namesake stores, its Torrid stores sales rose 1.2%. Total revenue fell 1.8% to $54.3 million. The company suffered in part by comparison to the prior year when it sold a large amount of products linked to the “Twilight” book and movie series.

● Wet Seal reported better-than-expected gain in November sales. Comparable store sales rose 7% last month compared to a year earlier. Analysts’ average estimate was for only a 0.8% gain in same-store sales for the month. November sales “exceeded our expectations” with clothes that were in demand and Black Friday promotions, Ed Thomas, ceo, said. The company’s Wet Seal chain, which sells clothes for teen girls, saw an 8.3% rise in November same-store sales. Same-store sales at Arden B., the company’s smaller clothing chain for young women, slipped 0.3% last month. The company’s total sales for the month rose 14% to $50.7 million, led by a 16.7% rise at Wet Seal and 3.6% growth at Arden B.

Zumiez reported comparable store revenue leaped 20.7% in November well ahead of the 12.6% analysts expected. Total sales for the month increased 26% to $40.4 million.

On Wednesday Zumiez said its fiscal third-quarter profit more than doubled as sales leaped 20% in the period ended October 30.  The sports apparel and accessories company said net income rose to $12.3 million, or 40 cents per share, from $5.1 million, or 17 cents per share, in the year-ago quarter. Revenue rose to $135.9 million from $113.2 million last year. For the quarter, comparable store revenue rose 14.4%. CEO Rick Brooks said the period produced the highest third-quarter profit in the company’s history.

●Cato said revenue at stores open at least a year rose 5% in November, handily beating analysts’ expectations for a 2% increase. Total sales for November rose 7%to $65.8 million.  So far this year, the company has generated $755.4 million in sales, a 6% increase over sales during the first 10 months of 2009. Sales in stores open at least a year have risen 4% so far.

● Ross Stores said November sales at stores which are open at least a year rose 6% on top of an 8% gain in the prior year. Total sales for November grew 10% to $696 million from $635 million in November 2009. The company said November sales exceeded its expectations as continued a focus on value that drove healthy traffic to its stores.
The company also said that year-to-date comparable store sales increased 6% on top of a 5% gain in 2009. Sales for the ten months ended November 27 improved 10% to $6.42 billion from $5.84 billion in the prior year period.

●Stein Mart reported flat sales for November. Total sales for November were $107.6 million, compared with $107.8 million in the same period last year. Comparable store sales were unchanged.  Stein Mart said November sales were better than the overall company trend in Texas, while sales were weaker in the Gulf states and Arizona.

● Costco posted a 9%rise in November comparable store sales. The largest U.S. warehouse club company, which operates 582 warehouses across the world, recorded 13% same-store sales growth at its international segment in the month. For the four weeks ended November 28, net sales rose 12% to $6.78 billion.

BJ’s Wholesale Club said that comparable store revenue rose 5% in November, with both food and general merchandise sales climbing. Sales topped analysts’ average estimates for a  3.9% rise. The warehouse club operator said its results included 1.2% from gasoline sales. Removing gas sales, the metric rose 3.8%. BJ’s said all major regions reported revenue increases at clubs open at least a year, with the strongest gains in the Southeast. Revenue for the month increased 8% to $900.1 million. Year-to-date revenue at clubs open at least a year climbed 4.8%, with gasoline sales contributing 1.9%. Total sales rose 8.6% to $8.74 billion.

●TJX, which operates such off-price retail chains as T.J. Maxx, Marshalls, HomeGoods, and AJWright, said its same-store sales rose 3% for November. TJX said its November sales figures were at the high end of its expectations. Total sales for November were $2 billion, up 7% from November 2009. Carol Meyrowitz, president and ceo said: “We are pleased business throughout the Thanksgiving week and weekend was brisk, and customer traffic continued to be up over strong increases last year, underscoring our belief that value is key for shoppers this holiday season.”

 

 

 

 

 

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